Rail safety is in the spotlight after yet another accident leaves 11 dead, nearly 100 injured

Good morning, nice people, and welcome to day seven of Ramadan. The big story this morning: at least 11 people were killed and nearly 100 injured in yet another train accident yesterday. There are at least a half-dozen investigations now underway into various accidents as well as infrastructure spending, training procedures and safety protocols at Egyptian National Railways. The news dominated the talk shows last night and is all over front pages this morning. We have chapter and verse in the news well, below.

***CATCH UP QUICK on the top stories from yesterday’s edition of EnterprisePM:

• Shakeup at CI Capital: Hesham Gohar is now the group CEO of CI Capital, with Hazem Badran and Tarek Tantawi leaving by 20 May.
• E-payments: Banque du Caire is looking to expand its digital services and e-payments regionally.
• Startup watch: Innoventures is in talks with a potential LP based in the GCC for its EGP 200 mn VC fund.

WHAT’S HAPPENING TODAY-

Amendments to the Disabilities Act will be with the House Constitutional and Legislative Committee and the House Social Solidarity Committee for review today. The proposed amendments, which earned Senate approval earlier this month, would toughen penalties for those convicted of bullying persons with disabilities.

PSA- It’s going to be stinking hot again today, with the mercury heading to 41°C this afternoon. One bright spot: It’s going to be a very dry heat, with the humidity at no more than 10%, according to our favorite weather app. Temps will fall back to a more seasonally appropriate low-to-mid 30s starting tomorrow.

** So, when do we eat? We’ll break our fast this evening — and mark one full week of Ramadan — at 6:25pm. Eat your yogurt and guzzle your water (and coffee) before fajr prayers at 3:52am.

SIGNS OF THE TIMES as we wade through the second quarter of the year:

• Consumers around the world have accumulated some USD 5.4 tn (yes, tn) in extra savings since the start of the pandemic thanks to a combination of government stimulus and delayed buying. Booming consumer confidence suggests businesses are looking at a robust second half of the year as covid restrictions are dropped and borders reopen. Read all about it in the Financial Times.
• Investors managing some USD 11 tn in assets want banks to set tougher emission targets for their lending activity ahead of a meeting of world leaders at the end of this week, Reuters reports.
• Global covid infections hit a new weekly record despite vaccinations, “with the worst outbreaks accelerating in many countries that are ill-equipped to deal with them,” Bloomberg writes.

Speaking of climate: Egypt has been left out of the US-hosted Leaders Summit on Climate, which will see 40 world leaders head to the United States this Thursday through Saturday, but it’s still good to remember who our friends are: The US Chamber of Commerce encouraged the Biden administration to invite President Abdel Fattah El Sisi to the summit in a bid to bolster Egypt-US ties in the energy, digital economy, health, education, and environmental sectors. Read this set of policy recommendations on Egypt by the chamber’s VP for Middle East Affairs, Steve Lutes.

MORNING MUST-READ, particularly for the Gen Xers among you: The New York Times columnist Charles M. Blow is out with a particularly thoughtful piece on My second phase of adulthood, meditating on what it means to be dealing with kids who are becoming adults, with parents who are in the twilight of their life, with dying friends and how he remains optimistic despite “having more summers behind me than in front of me.”

Speaking of summers: Have you made plans for Sahel yet? We have just 73 days left until high season really kicks into gear on 1 July, so if you’re in the market for a rental, now is the time to act.

MORNING MUST-WATCH- Reviving tourism in Esna: A project to revive tourism in Luxor’s Esna by restoring and rehabilitating the city’s heritage sites and surrounding buildings has helped retain local talent and support businesses in the city, Esna residents say in this feel-good video about how the work on their hometown has changed their lives (watch, runtime: 4:18). The nice people at USAID partnered with the International Cooperation Ministry, the Tourism Ministry, and urban developer Takween on the project, which kicked off back in 2016.

CIRCLE YOUR CALENDAR-

New goodies for iSheep? Apple is running a virtual event tomorrow at which pundits think it will unveil AirTags and a new iPad Pro with an improved display and faster processor, among other new products. The headline: Spring Loaded. The event will stream at 7pm CLT on Apple’s website and on YouTube.

EBRD President Odile Renaud-Basso could visit Egypt sometime this month, Al Masry Al Youm reported last week following a meeting with Egypt’s ambassador to the UK Tarek Adel. This would be her first official visit to Egypt since she was appointed to head the bank in November.

The Central Bank of Egypt will meet to review rates next Thursday, 29 April. We’ll have our customary poll of economists and analysts on the expected outcome from the central bank’s Monetary Policy Committee at the beginning of next week.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: Universities play a key role in Egypt’s entrepreneurship scene, offering a range of services to help students start their own businesses, we reported last week. Today, startup program leaders, entrepreneurs and VCs talk about what these programs do particularly well: early-stage awareness-raising, access to resources and sector-specific knowledge, mentorship and helping students develop skills with market applicability.

At least 11 people were killed and 98 people injured after a train derailed yesterday in Qalyubia, the Health Ministry said in a statement. The ministry had initially reported 97 injuries and no deaths earlier but revised the figure as the day progressed. The train conductor was among those who died, Health Ministry spokesperson Khaled Megahed said. The injuries include three critical cases, with most of them suffering from broken bones, cuts and bruises; 14 people have already been discharged from hospitals.

What happened? Initial reports indicate that four carriages on the train, which was heading from Cairo to Mansoura, derailed at 1:45pm at the entrance of Sandahur station near Toukh in Qalyubia, the National Railways Authority said in a short note. An investigation is underway to know the cause of the accident, the authority added.

It looks like another case of “human error,” House Transport Committee Chairman Alaa Abed told Ala Mas’ouleety’s Ahmed Moussa. Abed suggested that railway employees will be subjected to more rigorous training and frequent tests for illicit substances (watch, runtime: 18:41). El Hekaya’s Amr Adib noted that human error was also to blame in last week’s train accident in Sharqia (watch, runtime: 16:31).

Everyone and their mother is investigating the crash: Official investigations are now underway to determine the cause of the accident, the authority said, while the Prosecutor General has opened a criminal probe. Ten railway employees and officials were detained pending investigation, Ahram Online reports. A separate committee bringing together members from the Administrative Control Authority, the Armed Forces Engineering Authority and the Military Technical College, as well as others from engineering faculties, will also conduct its own investigation under a directive from President Abdel Fattah El Sisi’s directives, cabinet said in a statement. The House Transport Committee will summon the head of the National Railways Authority for questioning as part of its own investigation, Abed told Ahmed Moussa overnight (watch, runtime 3:28).

Don’t expect parliament to summon Transport Minister Kamel El Wazir (or push for his resignation), which Abed told Kelma Akhira’s Lamees El Hadidi would require proof that the minister committed gross negligence and is directly responsible for the accident. Abed rather quickly poured cold water on Lamees’ calls for political accountability after several successive train accidents, saying that placing the blame at El Wazir’s feet would just make the minister a “scapegoat” (watch, runtime: 6:40). Adib separately called for a solution that would prevent these incidents from happening again (watch, runtime: 15:13)

The latest in a series of train accidents: A similar incident in Sharqia took place last week, injuring 15 people but causing no deaths. There were no casualties in two other derailments — including on a train heading from Alexandria to Aswan on Saturday and another from a train on the Cairo-Aswan route — earlier this month, according to Masrawy. These came on the heels of last month’s train crash, which killed at least 20 people and left 200 others injured in Sohag, sparking fresh outcry over the state of the country’s rail network. Following the Sohag crash, the African Development Bank signed off on a EUR 145 mn loan for the Egypt National Railways Modernization Project to finance railway upgrades.

Condolences are rolling in: Saudi Arabia and Tunisia each extended their condolences to the victims’ families yesterday.

The train accident is getting wide coverage in foreign press this morning, with everyone from Deutsche Welle to Reuters and Bloomberg covering the story.

Expect daily covid-19 infections to continue rising in Egypt through the end of Ramadan, as the third wave has yet to hit its peak, House Health Committee head and former health minister Ashraf Hatem said, according to El Watan. University hospitals are facing an influx of covid-19 patients but aren’t facing any shortages in meds or equipment, Hatem said. Prime Minister Moustafa Madbouly and President Abdel Fattah El Sisi each issued warnings last month that Ramadan would likely see a jump in covid-19 cases.

Our vaccination program could get a leg up with additional funding and resources after the president ordered his government yesterday to provide the funding needed to ramp up imports and begin locally manufacturing covid-19 jabs, according to an Ittihadiya statement. Procedures are currently “underway” to begin manufacturing China’s Sinovac vaccine in Egypt through state-owned Vacsera, along with Pharco’s BioGeneric Pharma and Eva Pharma, Health Minister Hala Zayed said at the end of last week.

Religious services will be suspended for three weeks at churches in Beni Suef and Bahnasa, including during the upcoming Holy Week (which includes Easter Sunday) due to concerns over covid-19, the Coptic Orthodox Diocese of Beni Suef said in a statement. The suspension of services, which came into effect last Saturday, bans limited masses held by priests and deacons.

The Health Ministry reported 850 new covid-19 infections yesterday, up from 845 the day before. Egypt has now disclosed a total of 216,334 confirmed cases of covid-19. The ministry also reported 44 new deaths, bringing the country’s total death toll to 12,738.

AstraZeneca plans to have a modified version of its vaccine against the South Africa covid-19 variant by the end of 2021, according to Reuters.

Office + commercial spaces aren’t going to be subject to 14% VAT: Proposed amendments to the VAT Act would impose a 1% schedule tax on the rent or purchase of commercial and administrative property — meaning your office or factory won’t be subject to the full 14% VAT as was previously reported in the local press, the Tax Authority said in a statement. The authority’s clarification came months after property developers were up in arms over reported plans to impose VAT on non-residential properties, saying businesses are already suffering from the repercussions of the pandemic and will not be able to bear the additional costs.

We’re still waiting for word on a sugar tax as well as taxes on advertising: The amendments, which earned sign-off from the cabinet’s economic committee in June, would replace the 5% schedule tax on crackers and sweet pastries with the standard 14% VAT rate, but industry giants are pushing back on the tax The amendments would also subject most commercial advertising to the tax but scrap the 20% stamp tax on ads — and institute VAT drawbacks for tourists.

The timeline: The Tax Authority’s statement yesterday didn’t clarify where the bill currently stands, saying only that the House of Representatives will discuss it. The Finance Ministry has been holding public consultations on the proposed amendments with several industry players before shipping the bill to the House for discussion “in a few weeks,” House Planning and Budgeting Committee Undersecretary Mostafa Salem told us earlier this month.

The government plans to convert 450k cars to run on natgas within three years under its natgas transition plan, Oil Ministry spokesperson Hamdy Abdel Aziz told eXtra News yesterday (watch, runtime 5:13). That includes the 250k figure that was previously announced — which the Trade and Industry Ministry is handling — as well as another 200k the Oil Ministry plans to convert. It remains unclear whether the Oil Ministry’s target is a new addition to the government’s strategy, which aims to convert 1.8 mn cars over the course of a decade — a feat that is expected to cost some EGP 320 bn.

Background: The government delivered earlier this month the first batch of dual-fuel vehicles under the scheme to swap out old, gasoline-fueled cars. The strategy aims to get 70k new natgas cars on the road this year. The Finance Ministry is offering financial incentives for vehicle owners to take part in the scheme, and some EGP 16.2 bn is being made available by the government to provide subsidized loans through local banks. Some 68k people applied to convert their vehicles to run on natural gas as of early April.

Ethiopia is showing no plans of backing down from its plans to start the second phase of filling the Grand Ethiopian Renaissance Dam’s (GERD) reservoir in the upcoming rainy season this July or August, with Ethiopian Prime Minister Abiy Ahmed holding firm in a statement yesterday. Ethiopia will release water it stored during last year’s first filling through some newly-built spillways and claims it will share information on the dam’s filling and operation with downstream countries Egypt and Sudan, Ahmed added.

Whatever Ahmed is selling, Sudan and Egypt really aren’t buying: Sudan has reportedly already sent a letter to the United Nations Security Council asking that the council back Khartoum’s calls to bring international mediators into the stalled GERD talks between Egypt, Ethiopia, and Sudan, according to Ahram Online. Egyptian Foreign Minister Sameh Shoukry had also penned his own letters to the council and the UN General Assembly last week. Shoukry and Sudanese Prime Minister Abdalla Hamdok each signaled independently that they could take the GERD issue to the Security Council if talks continue to fail.

Aside from population growth and climate change, GERD poses the biggest risk to Egypt’s water security, Irrigation Minister Mohamed Abdel Aty stressed in a meeting with the Senate’s Defense and National Security Committee to discuss the negotiations, according to a statement. In the past 10 years of talks with Ethiopia and Sudan over the dam, Egypt proposed 15 alternative scenarios for the dam’s filling and operation that would fulfil Ethiopia’s goals from the dam without causing harm to its downstream neighbors, but Addis Ababa shot down all of these scenarios, the minister said.

Meanwhile, Egypt’s diplomatic blitz on GERD shows no signs of slowing down: Shoukry is heading on a tour of six African countries to discuss the negotiations and keep leaders in the continent abreast of the latest developments, according to a Foreign Ministry statement. The tour will take Shoukry to Kenya, Comoros, South Africa, the Democratic Republic of Congo, Senegal, and Tunisia. The minister and President Abdel Fattah El Sisi have been rallying international support for Egypt’s position on the GERD impasse for the past several months.

Case in point: The GERD dispute and Libya topped the agenda for Shoukry and his Greek counterpart Nikos Dendias during a meeting yesterday, according to a ministry statement. Both sides also discussed bilateral cooperation on all levels as well as issues of mutual interest including the latest developments in the Eastern Mediterranean. Dendias’ visit came a few days after reconciliation talks between Greece and Turkey kicked off (and stumbled) last week.

Background: The latest round of talks in Kinshasa earlier this month ended in yet another stalemate as the three countries failed to agree on a path forward for new talks. Hamdok urged the three countries’ prime ministers to hold their own summit this week in an attempt to resolve the impasse. Cairo and Addis Ababa have yet to RSVP.

Egypt’s non-oil trade deficit remained essentially flat in 1Q2021, narrowing just 1% to reach USD 9.55 bn compared to USD 9.68 bn in 1Q2020, Trade and Industry Minister Nevine Gamea said in a statement. The slim drop in the deficit came as non-oil exports rose 6% y-o-y to USD 7.44 bn in 1Q2021 despite the impact of covid-19 on global trade, while imports increased 2% y-o-y to USD 16.99 bn.

Chemicals and fertilizers accounted for the lion’s share of our exports, clocking in at USD 1.53 bn during the quarter, followed by construction materials (USD 1.35 bn) and food industries (USD 965 mn), head of the General Organization for Import and Export Control Ismail Gaber said in a separate statement.

Our biggest export markets: Turkey, the US, Saudi Arabia, Italy, and Malta, which together received nearly 31% of our exports during the first three months of the year, worth a combined USD 2.28 bn.

What about the CBE figures? Central Bank of Egypt (CBE) data on Egypt’s trade balance performance don’t line up with the figures from the Trade and Industry Ministry, which is a normal discrepancy because of how the two bodies calculate imports and exports, ministry spokesperson Yasser Gaber told Enterprise. According to Gaber, the ministry’s data is based on activity at Egypt’s ports, while the CBE relies on bank transfers. However, not all import and export payments are processed through bank transfers, Gaber noted.

Background: CBE figures released last week indicated that a rise in non-oil imports drove Egypt’s trade deficit to widen 6.6% in 1H2020-2021. Exports grew slightly during the first six months of the fiscal year by USD 131.5 mn y-o-y to record USD 9.3 bn. In 2020, non-oil trade deficit narrowed 17% y-o-y due to lower imports.

The Qalyubia train crash dominated the conversation on the airwaves last night. We have chapter and verse on the incident and the talking heads’ commentary in the news well, above.

Elsewhere, Thanaweya Amma students’ online exams were on the agenda for Education Minister Tarek Shawki, who phoned into El Hekaya’s Amr Adib for a recap of the ministry’s plans for the end-of-year tests. The ministry is running trial exams in April, May, and June to test out the online system and students’ tablets ahead of the final exams slated for 3 July. Alternative options, including administering the exams on servers that don’t require an internet connection, are also on the table, the minister said (watch, runtime 7:36).

Some 30k MSMEs are up for a combined EGP 200 mn in government financing within five years through the Local Development Ministry's Local Development Fund, Minister Mahmoud Shaarawy said in a statement. The fund has doled out north of EGP 48 mn in loans to 5,449 projects between September 2019 and February 2021, with women-led businesses accounting for 69% of the pot. The ministry is currently mulling cutting the interest rate on its loans for women breadwinners in rural areas to 4% instead of the current 6%, as well as offering loans at a 5% interest rate for drip irrigation projects.

ALSO THIS MORNING: EgyptAir has signed an MoU with Sudan Airways to provide training and advisory as Sudanese authorities look to modernize their aircraft fleet.

Diplomatic ties between Saudi Arabia and Iran could be restored after four years of frosty silence, with senior Saudi and Iranian officials reportedly sitting down for direct talks, the Financial Times reports, citing unnamed officials familiar with the negotiations. The meetings come as Washington, which has been distancing itself from Saudi Arabia, pressured the kingdom to end its military campaign against Houthi rebels and rejoin Iran’s 2015 nuclear agreement. The two sides are scheduled to meet again next week, although Saudi officials have denied engaging in negotiations with Iran.

Also worth knowing this morning:

• Syrians will head to the polls on 26 May in a presidential election that is widely expected to keep President Bashar Al Assad in power for a third term, with nominations for the election set to close in 11 days, Reuters reported.
• Israel and Greece signed their largest-ever defense procurement agreement which will see an Israeli defense electronics company operate a training center for the Hellenic Air Force in a USD 1.65 bn contract, the Israeli Defense Ministry said in a statement yesterday.
• US President Joe Biden is planning to lift his predecessor’s historically low cap on refugee admissions, pledging to go beyond his own previously announced limit and a policy to “regulate” the process, after facing blowback from lawmakers and aid groups, Reuters reports. A “final, increased” cap for the rest of the fiscal year will be set on 15 May, White House Press Secretary Jen Psaki said.

April: The government’s fuel pricing committee is scheduled to meet for its quarterly review of prices.

April: EBRD president Odile Renaud-Basso expected to visit Egypt.

20-22 April (Tuesday-Thursday): Renaissance Capital’s conference RenCap ESG – a New Focus for EM will take place virtually.

25 April (Sunday): Sinai Liberation Day.

29 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC — the holiday could be observed on a Sunday or a Thursday).

29 April (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1 May (Saturday): Labor Day (national holiday).

2 May (Sunday): Coptic Easter Sunday.

3 May (Monday): Sham El Nessim.

13-15 May (Thursday-Saturday): Eid El Fitr (TBC).

16-19 May (Sunday-Wednesday): The Arabian Travel Market (ATM) is taking place in Dubai. ATM is an international travel and tourism event to promote the Middle East as a tourist destination.

25-28 May (Tuesday-Friday): The World Economic Forum annual meeting, Singapore.

1 June (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

7-9 June (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

17 June (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

17-20 June (Thursday-Sunday) : The International Exhibition of Materials and Technologies for Finishing and Construction (Turnkey Expo), Cairo International Conference Center.

24 June (Thursday): End of the 2020-2021 academic year (public schools).

26-29 June (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center, Cairo, Egypt.

30 June (Wednesday): 30 June Revolution Day.

30 June- 15 July: National Book Fair.

1 July: (Thursday): National holiday in observance of 30 June Revolution.

1 July (Thursday): Large taxpayers that have not yet signed on on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

19 July (Monday): Arafat Day (national holiday).

20-23 July (Tuesday-Friday): Eid Al Adha (national holiday)

23 July (Friday): Revolution Day (national holiday).

5 August (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

9 August (Monday): Islamic New Year.

12 August (Thursday): National holiday in observance of the Islamic New Year.

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

16 September (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

30 September-8 October (Thursday-Friday): The 54th session of the Cairo International Fair, Cairo International Conference Center, Cairo, Egypt.

1 October (Friday): Expo 2020 Dubai opens.

6 October (Wednesday): Armed Forces Day.

7 October (Thursday): National holiday in observance of Armed Forces Day.

12-14 October (Tuesday-Thursday) Mediterranean Offshore Conference, Alexandria, Egypt

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

28 October (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

29 November-2 December (Monday-Thursday): Egypt Defense Expo

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

16 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.